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Update Date : 03-Jan-2023

Created Date : 31-Dec-2022

Category : Home Loan E-Book (Promotional_New)

Criteria to select the best home loan lender

Congratulations!!! By now you must have either shortlisted the desired property for yourself or must have atleast made up your mind to buy one.

So, what comes next?

Now, it’s time to make a loan application for buying that property.

As a matter of fact, most home buyers have a common tendency of chasing loan deals that offer them the lowest rate of interest with minimum processing charges.

Once they find such an offer, they instantly grab it without introspecting and analyzing other factors that can add much greater value to their investment.

If such incredibly low interest rates bounce back, you will only end up losing more money either in the form of extra interest or in the form of heavy transfer costs should you plan to switch to another lender for better prospects.

So, in both situations, you lose out.

Hence, you should always aim at getting things right at first.

For this, you must refrain from getting carried away by attractive giveaways that some financial institutions offer in return for a very low or no value at all.

How to make the right bank and product selection?

Loan deals are not limited to interest rates & processing charges alone.

What largely determine the overall cost of borrowing and eventually the value of your investment are the factors that go beyond that.

A home loan is a long term commitment.

While making an application, you must analyze factors that go beyond the rates and one time charges.

If the rates are incredibly low, then find out the reason for such low rates and analyze the hidden terms and charges.

If you are really keen on making your real estate investment work for you then do consider the following checkpoints while selecting a home loan lender.

1) Rate of interest – Ensure you get the lowest rate of interest but not at high benchmark rates. Loans originated with negative CRP may not sustain for too long.

2) Processing Charges – Lower processing fee is always an advantage as it helps you save money instantly.

3) Benchmark rates – The lower the benchmark, the more stable your rate will be in long run. Look for the bank that carries the lowest benchmark irrespective of the rates they

offer.

4) Online prepayment facility – Online prepayment facility not only help you save inconvenience & time but also money as the ability to make quick payment at a click of a button can save you compounded interest on a daily basis. Hence, prefer banks that allow you to make part prepayments online.

5) Interest calculation method – Choose a lender that calculates interest on a daily reducing balance over the one that does it once a month. It helps you save a few EMI over the years.

6) Products benefits – Though the home loan overdraft facility comes at a premium, it can save you a great deal of interest if you exploit it to its full capacity. Don’t judge a product by its price but by the value it offers.

7) Length of the tenure – Lengthier the tenure, the lower will be your obligation. The lower the obligation, the higher will be your contribution to your investments and home loan eligibility to accommodate other needs in the future. It will also help you manage your cash flow efficiently.

• And more